Digby Solomon op/ed on tax reform

Tuesday’s editorial in the Daily Press reached an incorrect conclusion about the merits of tax reform, originating in faulty logic about the nature of government, productive citizens, and taxation.

The editorial attempts to justify why the nation cannot afford a tax break by using the metaphor of a family discussing its budget around a kitchen table, and having to make decisions on what it can afford to spend.

Most families in such situations have one of two options: they can make difficult decisions about where to spend their current budget, or they can raise money by getting a second job, working more hours, or selling assets.

This comparison doesn’t work for government, which has only two means of getting most of its money: Increasing its debt load or taking our money through taxes.

If the family sitting around that kitchen table behaved like government, it might instead choose to rob its neighbors, using other people’s money for their own ends.

It’s amusing to see Democratic politicians and their media supporters feign horror at the idea that tax reform might increase deficits by $1.5 trillion. That figure is based on the false premise that stimulating business activity through tax cuts won’t generate more tax revenue. Our experience under both Presidents John F. Kennedy and Ronald Reagan proved that business, and individuals, use their money more wisely than the politicians.

But even if it were not so, Obamacare raised deficits by $5 trillion, while raising health insurance premiums for most middle class , especially young adults. The New York Times and Washington Post never raised a peep.

It’s even sadder to see the-foot-in mouth spokesmen for the Republican party fail at clearly articulating how allowing businesses to keep more money for growth, rather than on taxes, could help all Americans by creating more and better paying jobs.

My wife and other small business owners we know have already seen pay rates increase by more than 20 percent in the past year. This came about not through any minimum wage increase, or our generosity, but because the growing economy has generated competition for workers and bid up their price.

Yes, the wealthiest 1percent will benefit most from tax reform. I’m not one of them, but I don’t have a problem with it. This group pays more than 50 percen of the taxes, so it stands to reason they would benefit disproportionately.

They also are the only ones with the capital to put at risk to develop businesses and generate jobs.

To paraphrase former Sen. Phil Graham’s recent musings in a newspaper essay, “I’ve never had a poor man offer me a job.”

Missing from the hyperventilation over tax reform is a more fundamental series of questions we Americans seem unwilling to ask:

First, what is the basic function of government?

If you believe most good things originate from government direction, and don’t trust individuals to make the right decisions without it, you will favor a high tax, high spend government.

I have little respect for President Donald Trump. But recent quarters of GDP growth as high as 3 percent showed the benefit of easing the regulatory and tax burden on business. He’s outperformed eight years under the Obama administration, which was famously hostile to business.

If you believe government is best restricted to key roles that private enterprise cannot play — funding research, building infrastructure, providing for the common defense, adjudicating the law — then you probably think we’re already spending too much on the federal budget.

If that’s the case, we can cut taxes and reduce the deficit by cutting spending.

But the decision is not that simple, because Americans haven’t come to grips with the demographic time bomb that threatens our future: the demands of our growing population of elderly (this retiree included).

Entitlement spending on Medicaid, Medicare and Social Security already eats up 60 cents out of every federal dollar we spend. Medicaid often is the largest expense for any individual state, and Gov.- Elect Ralph Northam wants to put even more people on the medical dole.

That leaves little for paying for police, courts and military, or for investing in the infrastructure, basic research and schools that generate future growth. We’re saddling our young with both an underperforming economy and crushing obligations to provide for their parents and grandparents.

It’s time to have an honest conversation, and the news media could help by raising the larger existential issues at stake rather than pretending this is a class issue of wealthy versus poor.

Solomon is the former publisher and chief executive officer of the Daily Press Media Group.